Also published on the Huffington Post
And, we’re off to the races!
The spring real estate market in D.C. is about to be in full swing. What spring market conditions would be like was anyone’s guess since leading up to the holidays was just one long coma. Listings were sparse. Buyers were few. Time of death was called sometime in early November.
Markets typically reset themselves after a long hiatus like the holidays. It’s sort of like being in the middle of a heated discussion when the phone rings and you have to take the call. When you hang up, you can’t just pick up where you left off. You have to regroup. (I am suddenly reminded of when I was a kid and my friends and I would laugh at how our mothers could be screaming at us one minute and then “RIING,” followed by them taking a deep breath and purring “hello” like they were was mid-massage.) It’s like that with real estate. The calendar dictates that the market is due for a break and the flavor undoubtedly changes when it resumes. Some emotionally spent buyers may decide to find alternate living arrangements and some new hopefuls arrive on the scene.
As long as D.C. isn’t battling an Arctic Freeze a la January 2014, the majority of home buyers and sellers get busy on January 2nd, thereby kicking off the spring market. The rest of the holdouts get on board the Monday after the Super Bowl when they sober up. Listings hit the market with a fury and buyers are out pounding the sidewalks looking for their new home. This year so far has been no different.
I was especially curious to see what would happen this spring since the market really winded down to a close in the fall. Listings that we all thought would sell immediately last fall languished on the market for weeks, sometimes months. We were not sure if this was a sign of things to come but in many ways it was a welcome change. Perhaps the playing field would level a bit more for buyers and sellers.
As I began to see the new listings with clients, we all quickly got a taste for what was next. The first offer I wrote for a client in 2015 was one of 15 others. My client had a decent escalation and a substantial down payment and still, we were told that my client’s offer was near the end of the pack. The next offer was also one of several - many of which kept sneaking in after the deadline. Yikes. Someone pass the corkscrew.
I’m an agent who is all about getting clients a good deal; I love when people pay below list price. I even tell them this in our first meeting. But sadly, that strategy isn’t going to work this spring. It’s all about getting the house the client wants, and if that means going in with an offer that is list price or above, well, shoot. I’m sorry. I didn’t write the rules for this game but I’m adjusting my model to live by it so my clients aren’t left with nothing.
The forecast is this: Sellers can still enjoy multiple offers if they price their home properly. But that’s the key - pricing properly. It’s still tough to convince some sellers that 10 - 20% annual price appreciation was a fluke in 2013. If your neighbor sold for $500,000 in October 2014, you are NOT getting $550,000 now. It’s better to price at or slightly below market value and have multiple offers from which to choose. Too high a price won’t elicit offers. Sellers often have a hard time understanding this though until they see it in action.
For buyers? When something is new to the market and priced well, they should know what’s coming because they’ve seen this show before, right? It will go over asking and it will go quickly. This means you need to have your lender lined up, your documents ready to go, and your checkbook in hand. If you like a property, you need to move fast or someone else will.